by Marcia Leighton, Executive Director Client Services
As healthcare costs continue to grow, so does the angst patients feel over surprise billing and with good reason. A 2018 study by NORC at the University of Chicago revealed 57 percent of adults had received a bill for medical services they mistakenly thought were covered by their health insurance. A Kaiser Family Foundation Health Tracking Poll further confirmed patient worry as two-thirds of respondents disclosed that they were more worried about affording an unexpected medical bill than health insurance premiums, deductibles, or drug costs.
The anxiety patients feel over surprise billing is well-founded. According to a 2019 JAMA Internal Medicine study, there was a near 13% jump in emergency department visits resulting in an out-of-network bill. The ratio rose from 32 percent in 2010, to almost 43 percent in 2016. During the same timeframe, the mean amount of patient responsibility went up from $220 to $628. Similarly, the ratio of inpatient admissions with an out-of-network bill increased from 26 percent to 42 percent, with mean patient liability increasing from $804 to $2,040.
Although the studies mentioned point to the financial challenges of patients, the negative repercussions of surprise bills are felt by healthcare providers as well. A July 2019 report by the Center for Retirement Research at Boston College confirms the statistic that about 40 percent of American households would have trouble paying an unexpected $400 expense. When patients can’t or won’t pay surprise medical bills, the cost to providers rises. Healthcare organizations are forced to use valuable resources to try to collect on patients' outstanding accounts or write off the outstanding balances as bad debt.
With COVID-19 in the mix, hospitals need to be even more strategic and innovative to recoup some of the losses that have plagued them for much of 2020. In a recent educational webinar, Marcia Leighton, PatientMatters Executive Director of Client Services addresses surprise billing and steps to prevent surprise medical bills to increase front-end cash collections, reduce bad debt write-offs, and secure patient loyalty for years to come. Below are excerpts from the webinar session.
Today’s Patient-Consumer
I'm a firm believer that, in general, patients want to pay their hospital bills. They truly want to be able to satisfy their out-of-pocket commitment. But because of the increased financial impacts that COVID-19 is playing, it's becoming more challenging – With 30% of homeowners having missed their housing bills in July, 30% of renters missing their payments, the expiration of legislation that restricts homeowners/renters from being evicted coming up. All of these factors play a role in how patients look at paying or satisfying their out-of-pocket costs. Those who may have an existing payment plan set up are now having to choose, do I make this payment or do I provide groceries for my family? And with that, surprise, bills play an even bigger role.
Behind Surprise Bills
A surprise bill occurs after a patient receives care – typically, non-scheduled, sometimes it is scheduled – and a provider within their health care team is not in their insurance network. When the bill goes to be satisfied, the patient is held responsible for their out-of-network costs, due to a provider not being in-network. This can occur in an emergency room where maybe you have a traveling physician who is not in the network. [A provider] within the patient's surgical team may also be out-of-network and can result in a surprise bill.
I also throw into this lump, while it's not the official definition, that surprise bills include when patients are unaware of what their cost is going to be upfront, and when they receive their bill in the mail it's just really a shock. Then, unfortunately, what happens is the patient is billed the balance, thus increasing their out-of-pocket and the challenges surrounding being able to pay that bill.
Surprise Bill Statistics
On average, one in five patients incur a surprise, though, when they go to the emergency room, nearly three out of four patients that require some sort of ground or air ambulance rides are impacted by surprise billing. Additionally, nearly one in five patients are impacted because their physician is not part of the network.
Patient Billing Experience
Transparency
We want to first look at and change the patient's confidence. And that's going to include changing the conversation and the culture. So it's a big shift for you, your health care organization, and your community. We want to be very transparent with our patients.
As I mentioned earlier, I consider surprise billing being when patients are unaware, what their out-of-pocket is, in general, not just if a provider is out-of-network. So we want to be very transparent with what the cost is – especially with the CMS mandate for January 1, 2020 coming up for price transparency for our patients.
It's really important to have a clear understanding of what the cost of care is, to identify ahead of time that cost, and then how you are communicating with the patient. Are you setting up discharge workflows that require the patient to stop in and talk to a registrar financial counselor to talk through what their out-of-pocket is? Are you having the discussion early on? We've worked with some facilities that actually will have a divergence of care if it's identified after triage that their care is not considered emergent. Then you’ll have that conversation with the patient, letting them know that they continue to receive care in the emergency room, it'll cost X versus if they go to the local urgent care that is right across the street, it'll cost of Y. Are you ensuring that your patient's insurance is accurate?Simplicity
Another piece of building confidence is having your patient statements easy to understand. You want to make sure they are clear and concise – to highlight a couple of key areas to make sure that the patient knows where the bill is coming from.
- If a patient is receiving services from an out-of-network provider, is that easily identified on the bill?
- When you encounter patients who do have out-of-network costs, is it a little bit more than they were anticipating or able to satisfy this time? You want to be able to define what is due for the patient, versus what was from the insurance company, what they paid, and multiple payment options. Not a lot of companies today are offering different ways to sign up for a payment plan, some post it right on the first statement to allow the patient to opt-in. Are you are providing them with payment options that allow them to repay it in a way that satisfies both their budget and the bill on your end?
Personalization
If we look at the patient as a consumer and provide options the same way, they're more likely to comply because that's what they're used to – it's normal and it just fits in their budget. In terms of setting up the Payment Plan, it's important that as you look at the patient to determine what's going to work best for them.
We recommend that payment plans be offered based on the patient's propensity to pay. So identifying patients into a category that you know may need a little extra time to satisfy their out-of-pocket. If somebody is at a higher income bracket or a higher propensity-to-pay score, they could pay a little bit more and get that bill paid off a little bit quicker. That allows your patient population in that fixed income to take a little bit extra time, but, again, to satisfy the bill. Then, also, even on the statement itself, offering those payment arrangements.
- How can you automate the payment plan options? Make sure that we're tailoring them more to the patient versus just a one-size-fits-all. Designate work queues or workflows specifically for those patients within your early out process, or, whether it's internal with your customer service team, external with a vendor. How are you socializing any out-of-pocket discussion with the patient access?
- What kind of communication is being utilized? I mentioned putting something on statements.
- Can you automate our financial assistance programs and place that information online?
To view the webinar, Revamping the Patient Medical Billing Experience to Prevent Surprises, go here.
